EDIT: The Hilton Honors Visa card was withdrawn for new applicants in March 2018, and this article does not reflect the new Virgin Atlantic cards launched in April 2018. The Lloyds Avios Rewards cards are also temporarily suspended to new applicants.
People who drift into this odd hobby of ours often apply for a couple of credit or charge cards almost at random, perhaps because they were on promotion or because they didn’t know any better. They don’t have a long term strategy at that time, not surprisingly.
I thought it was worth taking another look today at where I think you should look to end up in terms of your credit card plans. If you have just become involved in miles and points, the question to ask is:
“What credit cards should I get now, and which credit cards should I end up with?”
It’s like a substantially less exciting version of dating! You may meet someone who is good for a short fling, but at the same time you also know that you will end up settling down with someone who better shares your long-term ambitions ….
What cards offer the most generous sign-up bonuses?
If you are just coming into the world of miles and points, you may be looking for a card to give you a ‘big hit’ in terms of points. This will help you build up your balances quickly and get a good redemption under your belt.
Based on the size and flexibility of the rewards, the most valuable American Express and MasterCard / Visa option would be:
American Express Preferred Rewards Gold (20,000 Avios for signing up, no fee in year one, good earnings rate) + Hilton Honors Platinum Visa (free night at ANY hotel in the wider group for spending £750!)
These two cards will effectively give you £500-worth of sign-up bonuses between them, and will help you get the first redemption under your belt. And once you’ve done, say, a free weekend in Venice / Rome / Berlin with your other half (flights on Avios, hotel via the Hilton Venice, which is a lot smarter than you might imagine / Waldorf-Astoria Rome / Waldorf-Astoria Berlin / Waldorf-Astoria Amsterdam) you’ll be hooked.
You are then in a position to think about where you want to go next with your credit card strategy …..
Which cards offer the largest mileage benefits for on-going spending?
For most people, your ‘end game’ with loyalty credit cards – assuming you are focussed on Avios – will probably be:
The 2-4-1 voucher with the BA PP Amex, when you spend £10,000, is the most valuable perk in loyalty credit cards, as I showed mathematically here. And the Tesco Mastercard is the highest earning MasterCard / Visa for Avios unless you meet the very tough requirements for the HSBC Premier card – although 0.3 Avios per £1 is still not great.
You may want to switch out the Tesco card for the:
There are two possible reasons to do this. If you spend £7,000 on the Lloyds card, there is an upgrade voucher which lets you redeem 2 x one-way Avios flights for the cost of the next cheapest cabin. First Class is excluded. The other benefit is that the Lloyds card comes with NO foreign exchange fees, saving you 3% on all your overseas spending.
Combined, these two benefits may justify the £24 annual fee. The headline earning rate on the Mastercard is 0.25 Avios per £1 which is lower than Tesco although Lloyds does not round down transactions in the same way as Tesco.
The Curve Card – with its 1% fee on foreign spend – is a potential option to pair with the Tesco card (3% FX fee) if you don’t want to pay the fee for the Lloyds card. You will even get paid £5 for trying out Curve!
You can still apply for other cards as good bonuses come along, especially once you’ve spent the £10,000 on your British Airways Premium Plus Amex to trigger your 2-4-1 Avios voucher. But these cards are both good choices for the long term.
“I don’t earn enough to spend £10,000 per year to trigger the 2-4-1 voucher on the BA Amex”
In that case, you are more likely to end up with:
… as the two highest earning free Avios cards (1 per £1 on the BA card, 0.3 per £1 on the Tesco card).
“I tend to travel on my own so I can’t use the BA Amex 2-4-1 voucher”
If this describes you, take a look at this article on cards for solo travellers. You will probably find the upgrade vouchers earned via the Lloyds Avios Rewards cards more useful. You are probably looking at:
“I have over £10,000 of Visa / Mastercard spend per year which cannot be made on an American Express card”
If this is you, I would suggest:
Whilst the IHG card has a £99 annual fee, there are some good benefits. As well as a high earning rate (2 IHG Rewards Club points per £1, worth 0.8p – 1p) you receive a free night voucher for any IHG property when you spend £10,000 in a card year. If used at a top InterContinental, the voucher could be worth £250+. You will also receive Platinum status in IHG Rewards Club simply for having the card.
“The Tesco card is embarrassing when I open my wallet and puts off the girls / boys”
In this situation, because the earning rate is poor on almost all other Visa and MasterCard products, I would go with:
British Airways Premium Plus American Express + whichever Visa or MasterCard is currently offering the most attractive sign-up bonus in your opinion
Cancelling an Amex Gold?
Here’s a good tip. If you are planning to cancel an American Express Preferred Rewards Gold to move on to a British Airways American Express, or simply to avoid the annual fee for Year 2 onwards, here is something to consider. If you get the free Amex Rewards Credit Card, you will not have to empty out your Membership Rewards points account. The ARCC card allows you to keep your Membership Rewards points active without paying a fee.
The point of this post is that, after a bit of churning, you will want to ‘settle down’ with cards which offer genuine long-term value and which can genuinely help you reach your Avios goals. One of the combos above may be your best bet.
Representative APR rates for the cards above can be found on our ‘Credit Cards Update’ page.
Want to earn more points from credit cards? – November 2020 update
If you are looking to apply for a new credit or charge card, here are my November 2020 recommendations based on the current sign-up bonus.
British Airways American Express
5,000 Avios for signing up, no annual and a companion voucher for spending £20,000 Read our full review
British Airways American Express Premium Plus
25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and the most generous non-Amex for day to day spending Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these:
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
Earn both Avios and BA On Business points with your business spending Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard for a limited company Read our full review
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.